On the 5th November 2020 Chancellor of the Exchequer, Rishi Sunak, confirmed that the Coronavirus Job Retention Scheme (CJRS) would be extended until March 2021, instead of ending as expected in October 2020. This was due to the ongoing economic turbulence created by the outbreak of the Coronavirus.
This allowed companies to claim up to 80% of employee’s wages, with a cap of £2,500 for each employee per month. Employers are still expected to pay their employees National Insurance and Pension contributions, however, the government made the decision to extend this support in the hope of safeguarding jobs during this unprecedented time.
In the updated guidance, released on the 5th November 2020, it was announced that all claims made between December 2020 and February 2021 wold be published by HMRC. This would include information such as;
- Employer’s names
- Indication towards the claimed value (within a banded range)
- The company number for companies and Limited Liability Partnerships (LLPs)
The details for claims made in December would be published in February and then on a monthly basis thereafter. So an employer who only made claims from March 2020 to September 2020 and does not intend to request help again will not have their details published. However, those who started to claim in March 2020 and intend to continue until March 2021, will have their details published for the period between December 2020 to March 2021.
There have been no suggestions towards the publishing being a move to deter business from claiming the Furlough benefits, but rather a way to avoid any further Furlough fraud. During his annual report to the Publics Accounts Committee on 7th September 2020, HMRC’s Chief Executive, Jim Harra, disclosed that HMRC was working on the assumption that 5-10% of CJRS claims were incorrectly paid out. This covered all claims that were paid, despite not meeting the formal requirements, whether by error or through deliberate fraud.
The publicity measures follow recommendations from a recent report from the National Audit Office (NAO) and further supported by a statement from the Association of Taxation Technicians (ATT) who claimed that publicity such as this could help to reduce fraud by enabling employees to see whether their employer was making claims on their behalf.
So what should employers do now?
Employers should review their staff cost modelling and projections based on the updated guidance for the CJRS, taking into account that financial support available under the scheme may reduce from the start of February 2021.
Employers must also consider the need to correct any underclaims made within 28 days of the end of the relevant calendar month. Given this short window for corrections, it is therefore critical that, where possible, processes are introduced now to calculate and submit claims to HMRC that are correct first time.
